Issue of the week: c’mon the Reds
China Everbright’s tilt at Liverpool FC highlights the country’s growing influence in English football
Last year, China’s President Xi Jinping outlined his ambition to make the country “a world football superpower”. That aim may have come a step closer now that China Everbright, a statebacked financial giant, is contemplating buying a large stake in one of Britain’s most prestigious clubs, Liverpool FC, said Jonathan Northcroft and Simon Duke in The Sunday Times. The deal, which could be sealed in the coming weeks, is understood to value the club at around £800m and would “significantly bolster its finances”. It would also be “the largest investment by China in the UK since the EU referendum”, coming at a time of “great strain in Sino-british commercial relations”. The chief stumbling block is that it is unclear whether Liverpool’s current US owner, Fenway Sports Group – the outfit founded by the American sports tycoon John W. Henry – is willing to sell.
The move follows a flurry of recent football deals, said Marcus Leroux in The Times. Shortly after President Xi’s visit to Manchester City’s training ground during his state visit last October, a consortium of Chinese private equity groups paid $400m for a 13% stake in City Football Group, which owns the club. Meanwhile, Wolverhampton Wanderers, Aston Villa and West Bromwich Albion have all come under Chinese ownership this year. “The sudden attractiveness of English football is symptomatic of a game swimming in cash after the Premier League’s recent £8bn broadcast deal.” It also shows the willingness of Chinese firms to pay big sums for businesses they reckon will flourish “in China’s vast domestic market”. The club fits the bill: in the Middle Kingdom, Liverpool (or “Liwupu” as it is rendered in Chinese) is “synonymous with football”.
Liverpool’s official position is that “the club is not for sale and no active discussions are taking place”, said the FT. But John W. Henry is taking the approach seriously enough to appoint advisers Allen & Co. Another potentially crucial player in the Everbright consortium (reportedly backed by China Investment Corporation, the country’s main sovereign wealth fund) is Amanda Staveley of PCP Capital Partners – a “keen Liverpool fan” who brokered Sheikh Mansour’s deal to take over Manchester City in 2008. Liverpool have been in the doldrums of late: they won their last major trophy in 2012. But a “dearth of trophies” has “barely troubled the bottom line”. Earnings have risen to £62m from £4m since 2012. Indeed, “seen through a spreadsheet rather than from the Anfield terraces, Liverpool is a sports marketing company with a football club attached”. No wonder the Chinese are so keen to grab it.